Thursday, Aug 06, 2009
Debt fueled mini-boom continues - thank you QE!!!!
Express: HOUSE PRICE BOOM STARTS AGAIN
''PROPERTY prices yesterday showed their most significant rise since the housing bubble burst almost two years ago.
The latest figures provided a massive boost for the industry and led some experts to announce the end of the housing slump and a return to sustained price rises.''
Posted by hpwatcher @ 06:19 AM (1518 views) Add Comment
24 Comments
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1. hpwatcher said...
Have these people forgotten about QE, and the fact that the government will do anything to create the lie illusion that things are returning to normal? The slump may have been delayed, but it's still coming.....the money being spent, will take years and years to pay back.
2. mrflibble said...
No FTB has been able to afford a place for years, at least not via a responsible deal involving a genuine 10% deposit and a 3.5x single income mortgage. So now we are expected to marvel in the news that prices are going up again. You have to love the way the housing market commentry goes, up is good, down is bad, irrespective of who is affected.
3. rotten tomato said...
I think it's all made up numbers and VI tripe plus a hefty dose of government pre-election spin. Will pop again along with the DOW. End in tears before winter.
4. mystie010 said...
mrflibble I totally agree. If the house price boom is back on then I think the House Price Crash website will end up turning into a support group. I for one will need tea and sympathy because I am truly at the end of my rope with all these idiots (VIs) that think high house prices are a good thing. I'm still hoping for the 'who laughs last last longet scenario'.
5. doomwatch said...
If they were truly independent, today is the day the MPC should signal they will not allow this
to happen again by raising rates by 0.5%.
6. growler said...
@5. doomwatch.
That's something they won't do fopr sure. If central banks are happy to leave QE-gained deposits at the BofE with 0.5% rates, they'll be doubly happy to leave them there at 1.0$. Since inflation figures and prospects of a double dip slump are realistic - they won't see inflation either. So expect a 100% wait and see.
I actually expect the BofE to pump more cash in "and don't spare the horses".
7. taffee said...
agree.....never in history have houseprices risen when unemployment is going up,credit is difficult and businesses are going bust
This is pure lunacy created by new labour
8. hpwatcher said...
@5. doomwatch.
That's something they won't do fopr sure.
Gordon Brown simply won't allow that.
9. nomad said...
Fame for HPCers. This was the first comment posted on the Express site:
"This headline will be sending shivers down all the doom and gloomers spines.
For the last 2 years I've watched a group of people trying to talk the market down.They hoped to cause a panic resulting in people selling their properties for less than the true value.
I'm glad to see it didn't work out for them and prices held up. People didn't need to panic and sell. Just sit tight and wait it out.
Property will always be a good bet in this country. Don't let anyone tell you different.
Now the doom and gloomers can save a deposit and buy like everyone else.
Any talk of a big crash now is stupid."
But read the other comments - by Express readers - they are all against the fundamental philosophy of the article. HPCers, together with Moneyweek, IMO are on the winning team and I, for one, am very grateful to you all.
10. andrew said...
taffee @7,
Agreed, something very remarkable is going on, if it is possible to engineer another bubble / recovery it will be done, after all it has been going on for a good few years way past anybody's expectations so why not a while longer ?
I think the key is people's attitudes, we do not live in a society where hard work is rewarded, there are no real prospects for the many to get comfortably well off, so the work around for many has been property and will continue to be.
The only real flaw that I can see from properties around my area, and I do monitor this as the real indicator is that the prices have gone up but really nobody is buying, some have been on the market for about a year around here. Some BTL renovations going on but nothing else is budging.
Sad really.
11. growler said...
@9 Nomad.
If only such as site as this (or the internet) was there in the early 1990s...
But when you think about it, in those days people were fed a diet of the printed press pretty much exclusively. But STILL the market was depressed for a long time.
Now people are in houses they would otherwise never be able to afford. They ain't going to sell not because they don't want the equity they think they've got, the won't sell because they KNOW they wouldn't get the same sort (quantity) of mortgage they had. That means they'd have to downsize. Now how would that go down with the chatter at parents evenings....?
So they are sitting tight, sitting it out.
That leaves those with dosh to forage for scraps. In fairness, some scraps will be good. But as soon a people start to put the houses on the market increasing the supply and industry recovers to build yet more supply or increase the renting stock with the grand rent schemes we've read about - prices will fall. They have to. Anyone with a non-traditional size mortgage CANNOT move up the ladder. If they sell, it's because they NEED to. Meaning moves down a few rungs of the ladder - to reduce their personal debt.
12. timmy t said...
I wouldn't be surprised to see Labour try to really talk the economy up now as well as printing more cash in a last gasp effort to win the next election. They will fail and the Tories will come in. The Tories will then blame Labour for the state of the country and raise interest rates while they can still point the finger. We'll then see the mother of all crashes.
13. little professor said...
14. uncle tom said...
tt,
It's every man and Harriet for his or her self in Labour now - none show any serious interest in the welfare of the electorate now. They know Labour is sunk - they're merely fighting for places in the lifeboats.
The Tories will come in, probably with the worst economic legacy ever.
Preventing hyper-inflation is going to be their biggest challenge, and a challenge also for other countries, both developed and developing.
Take a look at the exponential curves on the money supply graphs (total amounts, not growth rates), and ask yourself "what happens next?"
http://en.wikipedia.org/wiki/M4_money_supply
15. nomad said...
The UK progress looks tame compared to the US and India.
"What happens next?" Well those graphs do not feature dips, let alone reversals.
16. titaniccaptain said...
Hey all we all might have a problem with this type of blogging..........There will be a charge for viewing news articles online!!!!!!
http://www.economicvoice.com/blorumpost.php?blorum=1&post=1557
Send this accross all blogs!!!!
TC.
17. timmy t said...
Uncle Tom - My point is that Labour will (despite everything) try to go out on a high so they can blame the tories when it collapses, and the tories will want the collapse to happen quickly after they come in (If it hasn't already happened) so it can still be blamed on Labour. I wouldn't be suprised to see the change in govt as the real turning point for the housing market. But the continuation of QE, whilst making everything look rosier to the likes of Daily Express readers in the short-term, will make the eventual crash even more painful.
18. taffee said...
andrew@10...........sad but true...markets tend to bottom out when no-one is interested and the asset becomes a dirty word
commodities like oil fell for 20 years from the 1980's all the way down to $9 in 1999....look at equities over the last 12 years(50% lower or more)
currently property is in the early stages of that cycle
19. uncle tom said...
"Well those graphs do not feature dips, let alone reversals"
But neither can they continue to grow at the same pace. Some look able to oscillate gently down, while others look vulnerable to sudden collapse....
~~~
tt,
I don't disagree - Labour will do anything to make things look a little less bad during the election campaign, regardless of the longer term consequences. I would not be surprised if they try sending everyone a cheque for £1,000 at Xmas.
The Tories will not want the recession to still be grinding on five years hence; indeed they will probably reckon on getting all the unpopular decisions made within the first couple of years, while they can still blame Labour, and hope that people have forgotton come the following election. My concern is that they don't really appreciate how tough they will have to be..
20. luckyjim said...
So the Tories will come to the rescue and let house prices fall ? This is the political party that employed Kirsty Allsop as an advisor on housing matters?
21. timmy t said...
Luckyjim - House prices HAVE to fall and I think this is now common knowledge. The problem is that no political party wants to be seen as the one responsible for making it happen. A change of government is the ideal time to do it and blame the opposition.
22. luckyjim said...
Timmy
Like it or not, most people - including tory voters - see rising house prices as a good thing. Just look at the express front page. Cameron will do what he can to stop the market crashing - he'll abolish HIPS and reduce or abolish stamp duty for a start.
23. timmy t said...
LJ - but the tories know that prices can't rise from here (Or even stay at this level if this country is to thrive). They need to return to a sustainable level first. If they can blame that return to the sustainable level on Labour, then they will.
24. uncle tom said...
In truth, I don't think the Tory high command have any real idea whether house prices will go up, down, or fester.
However, with their backs to the wall economically, they will have no money to throw around in support of narrow interests.
I am hopeful that they will set out to liberate the homebuilders from much of the petty regulation that has stifled that industry, and crank up home building. Grant Shapps, the shadow housing spokesman, has an entrepreneurial background, and will hopefully make an effective minister; if keeps the remit in government..